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Brexit: Britain, EU strike financial services deal

Posted on Monday, November 05, 2018 by Judy Cobb

UK, EU strike tentative Brexit deal on financial services

"The monetary policy response to Brexit, whatever form takes, will not be automatic and could be in either direction", the bank said in its quarterly Inflation Report. However, one official said the letter, while a week old, still reflected current thinking.

In a letter accepting his proposal of a November 21 evidence session, committee chair Hilary Benn said he was "disappointed" with the new Brexit Secretary's failure to follow the pattern of regular updates established by his predecessor David Davis.

The campaigners are also asking MPs to support improving the rights in the deal, as they fail to protect all of the current rights enjoyed by Britons overseas or European Union citizens in the UK.

Also, the International Monetary Fund said that the consequences of Brexit may hit hard the financial system of the EU.

The Times newspaper said a tentative deal had been reached on all aspects of a future partnership on services, as well as exchange of data and including what would amount to a concession from the European Union on bending the "equivalence" rules.

The pound, known as sterling, could continue to trade strongly, although further moves may be dependent on the Bank of England's decision on interest rates scheduled for later in the day, said Peter Iosif, senior research analyst at IronFX, in a note to clients.

The measure would be an insurance policy to ensure there will be no return of customs checks on the border between Ireland and Northern Ireland if a future trading relationship deal is not in place in time.

Their upbeat assessment came as Arlene Foster, the leader of the DUP, which props up the Tory government and has threatened to block Theresa May's deal over the Irish border issue, also indicated a deal appeared close.

May has rejected this but proposed keeping the whole United Kingdom inside the EU's customs and tariff rules as a last-ditch emergency option, if no other deal can be found to keep the border open. Arguments over how to manage the border between EU-member state Ireland and British-ruled Northern Ireland have threatened the talks. "An agreement on the details of that backstop should be possible".

For May, this is critical.

The European Commission said a future financial services agreement would only be discussed after a Brexit divorce deal has been finalised.

Downing Street say a deal will be signed "as soon as possible".

The EU has rejected May's demands for a clear end-date to the backstop, insisting that it will not be a guarantee worth having if it's not indefinite.

The Irish border has proved the biggest obstacle to a deal, with both sides vowing not to reinstate a hard border between Ireland (Other OTC: IRLD - news) and Northern Ireland for fear of destabilising the peace agreement. Negotiators are now looking at different alternatives to try to break the stalemate, the officials said.

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